Founded on Risk and Reward, Now Too Scared to Go Out
The post-pandemic world belongs to those with the strongest entrepreneurial spirit. Those looking to government to solve their problems will wither and die. By Nick Cater
The chance of contracting COVID-19 in Victoria at the moment is less than 0.002 per cent. If Victoria were a country, it would be the 90th least dangerous place on the planet in which to shelter from the pandemic.
In the light of these reassuring facts, it seems surprising so few Victorians are protesting at their government’s gross over-reaction to the virus.
The severity of the spread in Victoria is roughly similar to Canada, which is also experiencing a second wave. Yet there are no reports of Canadians receiving six-month prison sentences for crossing a state border or being wrestled to the ground by police for exposing naked faces.
No Canadian, as far as we can tell, has been harassed by police on their front lawn for having the temerity to put their bins out after 8pm.
Our declining appetite for risk has found its moment. Better safe than sorry is the mantra — no measure too drastic to contemplate, no risk too slight to ignore. Yet our timidity in the face of mild danger will make this a longer and deeper recession.
It bodes ill for the recovery. Willingness to take risks in the hope of reward is the motivating force of small business and a precondition for innovation.
The post-pandemic world belongs to those with the strongest entrepreneurial spirit. Those looking to government to solve their problems will wither and die.
The dramatisation of danger has been a feature of this risk-averse century when, ironically, our lives have never been safer; life expectancy for Australian men has increased by three years and women two since January 1, 2000.
Our financial health too has strengthened. Twenty years ago, the wealth of the average family was the equivalent of about $600,000. Today it is more than $1m.
Yet every new day brings another expert saying we are at risk and the future is bleak.
Chief among the doom-mongers is the public health brigade, the experts who in Victoria at least have more power than the government.
It is as if they have been softening us up for this moment, demanding restrictions on advertising fast food, sugary breakfast cereals and soft drinks, each of which at various times has been described as the new tobacco.
COVID-19 is the pestilence of their dreams; a virus so easily transmitted you could catch it from a lift button but whose long-term risks were largely unknown in February, giving the health bureaucrats their chance to step in.
The worst-case scenario was extracted from the only modelling then to hand; the threat was amplified in those parts of the media that never miss an opportunity to turn it up a notch.
Pretty soon the doom-mongers had convinced us that COVID was potentially the new ebola, or could be, if we didn’t take drastic steps to restrict its spread, which they would largely dictate.
The same advice was being given to almost every government in the world backed by the same spurious modelling. Some, like New Zealand, folded immediately, introducing draconian restrictions from the start. Others, like Sweden, resisted.
A few, such as Australia, steered a middle path as best as they could on the grounds that while risk can never be eliminated, neither should it be ignored.
As a result, Australia has a better chance than most to thrive in the post-pandemic world. Were it not for the Victorian outbreak, we would be tied with New Zealand in bottom place among the 37 OECD members ranked by infection per capita. Even with the latest outbreak, we are seventh from bottom, with 20 times fewer deaths per capita than France, Italy, Britain and the US.
Yet the opportunity to return to near business as usual quicker than the rest of the world is fast disappearing, a casualty of our premiers’ risk aversion. Our closed state borders, almost certainly unconstitutional, have become roadblocks in our domestic economy.
In a nation that has thrived on free trade, citizens can no longer trade freely among themselves. This is what happens when state governments become incapable of making trade-offs, the very thing we elect our politicians to do. It is what happens when they lack the courage to balance competing public health risks with the risks to wages and jobs.
The Victorian Premier and his Chief Health Officer have been asked countless times what level of community transmission they are prepared to tolerate, but they have prevaricated. They appear determined to wipe the virus out altogether through non-medical means, a goal that is unnecessary, unachievable and unaffordable. The risk of infection, like the risk of car crashes or industrial accidents, cannot be eliminated, but it can be made manageable.
This week we will get an indication of how well or badly we are doing, with the release of the national accounts for the June quarter. It is a measure of how badly the world economy has been hit that a single-digit percentage fall in GDP would be regarded as a stellar performance. GDP in Britain has fallen by 20 per cent with other European nations in the mid to upper teens.
We can be sure, however, that the fall will be larger than it would have been if premiers, notably in Queensland and Victoria, had not seen electoral advantage in embellishing fear and piling on the pessimism.
At the very time Australians should be getting back to work, ill-judged policy decisions by state governments are keeping them on welfare and businesses on life support. The longer it stays that way, the harder the habit will be to break.
Rising living standards, Robert Menzies once said, “are the product of progressive enterprise, the acceptance of risks, the encouragement of adventure, the prospect of rewards”.
There is no government department that can create these things, as Menzies went on to say. But governments certainly have the ability to destroy them.